Oh No! Book Piracy Is Coming! Run And Hide!

from the blah-blah-blah dept

I have to admit that I started to read Randall Stross' latest article at the NY Times over the weekend -- Will Piracy Become a Problem for E-Books? -- but originally stopped a couple paragraphs in. It struck me as the laziest of lazy reporting tricks by Stross. It's a trend piece without a trend, basically pure filler. However, we keep getting submissions with pleas to debunk some of the more ridiculous claims in the article... so, we'll take a quick crack. The main problem is that it uses the recording industry as an example -- with bogus and/or misleading recording industry data, citing both the RIAA and the IFPI in stating that "piracy" has been a problem for the music industry. Tragically, there is no actual evidence to support those claims. Piracy has coincided with the decline in sales of recorded music, but the causal link has not been shown. In fact, we've pointed to numerous studies that showed those who file share tend to buy more music than in the past. But, more importantly, recent studies have shown that while recorded music sales have gone down, the overall music industry has grown.

All that's really happened is that technology has resulted in a shift in how the dollars are spent: more goes towards live shows and merchandise than in the past and less on recorded music. The end result, though? More money being spent on music overall and more money for musicians. The only ones who have less money? The middlemen an the record labels who were too slow to update their business models once it became obvious which way this trend was going. Claiming that the numbers from the recording industry show the "harm" done by piracy is like claiming that the numbers from the Horse Carriage Association of America show how automobiles killed transportation. Recorded music does not represent "the music industry" just as horse carriages did not represent the transportation industry.

And, of course, it's worth looking at how such "piracy" impacts other parts of the industry. In one recent study done at Harvard, if you add in the sales of digital music players, such as the iPod, the music ecosystem has grown tremendously. In fact, that's part of the reason we've argued in the past that the ebook industry, if anything, really could use more piracy, not less, because it would help drive the overall market forward, and more quickly open up new business models. Fearing piracy is a fool's game. Getting more information out to more people more quickly only opens up opportunity.

In music, costs of production have gone way down, which has a lot to do with the growth of the music industry.

In the fiction business, the costs of production are more or less the same (producing the physical goods isn't so much of the cost). While certainly the internet will facilitate new opportunities for marketing, freelance editing, etc. and the major publishers may ultimately be in trouble for that reason, but I see piracy as a much bigger potential threat to the industry here than in music.

The point is that once e-book-readers become as nice as actual books, novelists just don't have too much to offer in the way of "CwF+RtB" beyond their novels themselves (which will be easily pirated). In music, people can give away their recordings for free and then make their money from live shows, tshirts, etc. (well, pop musicians can--I'm still not convinced this works for, say, classical). Live shows by bands you like can be really awesome, and well worth paying for.

From a novelist, I generally just want to read their novels. I don't really care about signed books, I don't especially want to talk to them necessarily, I've never been to a book signing, etc. I just don't see what they could offer that I would actually want to buy beyond their books themselves.

Author Eric Flint's Column on eBooks and Piracy

His "Salvos Against Big Brother" column in the Jim Baen's Universe e-Magazine are or should be required reading for any debater in the copyright/DRM/piracy arena.

As far as I can tell, his position is that the Great Enemy of artists and creators isn't piracy but lack of exposure, and for every sale supposedly lost by unauthorized copies, an artist (and his publisher) actually end up with a net gain in new customers, who might otherwise never even find out the good stuff exists.

Re:

I respectfully disagree.
With ebooks, as this is about that, you don't have the cost of paper, of ink, of printing presses, of distribution costs, of storage costs, etc.
So the production costs with ebooks go WAY down.

It's easy for any budding novelist to churn out ebooks left and right. The only problem with that market right now is that there is no definitive format. Sure you could put out a pdf, but not all readers understand PDF (for the Kindle for instance you need to convert the file).
Or you could go the DRM route (like Amazon's Kindle format versus the new Sony Epub standard, and with Amazon's provision, you can't have support for both DRM systems on 1 device, it's either thee Sony Epub DRM OR the Amazon mobipocket Kindle DRM scheme).

On CwF+RtB, ask JC Hutchins, Tee Morris, Philippa Ballantine, Scott Sigler (amongst others) how to do that. They even went a step further and released their novels as audiobooks/semi-audiodramas FOR FREE (on podiobooks.com and on their own feeds). They created their own market.
Or ask Cory Doctorow, who released a FREE drm-free ebook in almost every conceivable format (crowd-sourced) of every book he publishes.
You can download those books, or buy them through their Amazon affiliate link. (incidental bonus, the author gets extra cash if you use his/her Amazon affiliate link).

Textbooks

Textbooks are one area where open source ebooks could be a huge threat to the industry. Textbook publishers are charging insane prices for textbooks. I have been using free and open source books every chance I get.

Epub versions of most commercial textbooks are not hard for students to find, and the high price of original work makes illegal copying a very attractive option.

It will be interesting to see how textbook publishers react to this. I think they are pretty well addicted to their large margins at this point, and it will be interesting to see if they can give them up to protect their market share.

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Personal anecdote. I've bought a number of books of the authors I've mentioned, even though I could get them for free, or in many cases, I've already listened to them.
They gave me a reason to buy, because I liked their stories, and I like what they are trying to do.
I donated through podiobooks.com (75% goes to the author) AND I paid for the books using their affiliate links.

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While you succeeded in disagreeing with one of AC's minor points, you failed to address his main point that authors don't have much to sell beyond the words that they write.

So, if ebooks are free, how can authors make money?
Give it away and pray ... not a smart idea though it might work
Write books and short stories via sponsorship (sellout)
Sell access to yourself (not likely to bring in big bucks)
Turn books into movies/games (good luck with that)
sell collector's editions and merchandise (perhaps)

I for one do not believe that ebooks should be given away because I do not see much opportunity to make money from writing otherwise. However an ebook should be much less expensive than a hardback or even paperback because there is simply no physical packaging or distribution. Also I'm betting that if books were $1 - $3 authors could be direct selling and make better money per copy AND sell more copies

Anyone arguing ripped music hasn't put a huge dent in CD sales, or data sales, is in complete denial, or simply removed from the habits of young adults with access to technology. Seriously, can anyone really argue "no causal connection" with a straight face? I strongly suspect there is a fairly large demog of teenagers that haven't paid for their music habit in many years.

Yes, in the current world where e-book-readers are crap (though getting better), you can distribute electronic copies for free and a lot of people will still buy paper copies.

But once e-book-readers provide a better experience than paper books, if e-books are free, I'm just not seeing any reason to pay any sort of money to the authors. (Besides perhaps my potential willingness to essentially donate money to authors I support, which isn't the sort of business model we're looking for here.)

Maybe there's a future business model out there for novelists that can involve embracing piracy but everything I've seen so far is dependent on paper books being more pleasant by far, which I just can't see lasting forever.

And yes, the textbook industry is surely in for some disruption in the near future, though there I think the fundamental problem leading to such ridiculous prices is simply that the people choosing the textbooks aren't the people who have to pay for them. Electronic distribution isn't going to fix that.

Re: Author Eric Flint's Column on eBooks and Piracy

Anyone arguing ripped music hasn't put a huge dent in CD sales, or data sales, is in complete denial, or simply removed from the habits of young adults with access to technology. Seriously, can anyone really argue "no causal connection" with a straight face? I strongly suspect there is a fairly large demog of teenagers that haven't paid for their music habit in many years.

No one's claiming that young adults are buying as many CDs/downloads; the claim is that the total portion of their income that they're spending on everything to do with music (including not just recordings, but also concert tickets, assorted merchandise, etc.) has gone up. As such, the music industry as a whole is growing and doing well, although some of the older record labels that are too focused on only CD sales may be in trouble.

There's no reason to expect that rampant piracy would have the same overall positive effect on the publishing industry, however.

Re:

"I strongly suspect there is a fairly large demog of teenagers that haven't paid for their music habit in many years."

Yeah, I know I didn't. But back then we called it LISTENING TO RADIO. And it was so harmful that the industry would break the law to entice DJs (back when they had some kind of control over what they played) to play their crap. It was MADNESS!

Fortunately home taping killed music, and we don't have to deal with that now.

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Where does it say that writers and artists are entitled to rich and fame off their books?
I work 40hours a week for my paycheck, and I can get by, I don't get famous for my work.
Now why would artists and writers be entitled to that?
Yes they made a creative work, and when I buy that work, they are entitled to my money. But only then.
Btw, why would making money of short stories via sponsorships make you a sell out? If the content is decent/good I see no problems with that.

Look, artists, writers and musicians can have other jobs next to their creativity. Pip Ballantine is a librarian, Tee Morris is a teacher, I believe. They write because they love to write, and I'm sure the extra income is very nice. I'm sure if they could live off their creative works, they'd do it. But nowhere is it written that they HAVE to live off their creative works.

If you are as an artist in it solely for the money, you are in the wrong business.

Re: Re:

You were paying for the music by listening to the ads, unless you were one of those who station hop. If you did this then you were stealing the radio waves. This is not unlike those who use the bathroom during the commercials, they are stealing television.

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I'm not saying that they are entitled to any money at all for their work, and I'd be all for them giving away books to increase readership. but the question is what can they do as authors to be professional authors? There isn't anything wrong with being a "sellout" either, but to some people it is a terrible thing, which is why i included that comment.

So if I decide to write a book (and lets just assume it is an incredible and popular book) I would have to write it in my free time since i also work a 40+ hour a week job. Then if I released it for free as an ebook how do you propose i monetize that book? Assume I've got the CwF part down solid, what is the RtB?

ebooks

Here's food for thought: Amazon has been giving Kindles away to students for them to read textbooks, and the experiment has been a failure because the Kindle won't let them manipulate the textbook the way the would with a treeware version, such as by highlighting and adding notes and thoughts.

Re: Textbooks

This is true but, not to repeat others here most of what you pay for in a book is the printing and distribution especially with crude oil prices on the rise, and promotion of course to a lesser extent. This industry needs to be turned on its head though.

I have to say that despite so many well respected professors supplementing their income with text book writing, the quality is unbelievably poor. Many textbooks contain such a plethora of unusable and indigestible information that they bold type for you (typically humanities books) while others cover such a wide variety of topics that no single topic is covered in adequate detail if you should have a problem (typically math and science books). Add more than one suggested book for each class and it's likely no one will read them unless the professor takes exam questions from the footnotes.

eBooks could be just the tool for your professor to write their own book, just for the class that they teach and sell it to students themselves. I can think of worse ways to spend a summer. As a side note, being that through to graduate school one would be expected to spend over $10,000 on textbooks I am not weeping for the industry as it stands.

That said, I don't think anyone protested the idea of a library when those were popularized and the salable book as we know it has flourished since then.

Re: ebooks

This is not true, the Kindle 2s in addition to having a built in dictionary that puts the word definition at the bottom of the screen in two lines so that you can learn new words instead of inferring a definition, allows bookmarks, highlights, and notes. In addition to this you can view all your bookmarked pages, highlighted text, and notation in a separate screen with no need to flip through the rest of the book. It is beyond convenient with the exception that the exclusive Sprint linked Whispernet, lack of USB sync, proprietary book format, and DRM leaves much to be desired.

Re:

The simple answer to this is that music that people download for free isn't necessarily music they would have purchased anyway. The choice is not between to pay or not pay it is not to pay or not at all in most cases.

The death of the publishing industry.

I'll go way out on a limb here, and predict that the book publishing industry will die completely about 20 years after they successfully find a way to keep people from reading books without paying for them.
Nobody spends any significant amount of money on books unless they enjoy reading. I'm willing to bet that pretty much everyone who enjoys reading learned that while reading books for free, mostly in the local library. If all books become DRM crippled digital files, lending stops, and there simply won't be a next generation of people willing to spend money on books.

As for writers not having things to sell other than words, how about these ideas:
- earlier access to the words. First releases to paying customers only.
- input to the writing. paying customers get to suggest potential changes to the storyline.
- access to the writer. anything from speaking tours to online chats to dinner and a movie.

There are ways to make money off words, the writers are just going to have to find ways that don't involve simply sitting back and waiting for that next royalty check to arrive.

CwF+RtB for authors

Authors can connect with fans just as well as musicians can (and often better, since authors generally know where their shift key is when communicating via text).

The only thing missing from their collection of "reasons to buy" is the ability to sell tickets to live concerts, but they have plenty of other things to offer (I've included some webcomic examples below, as I suspect webcomics offer a better model for the future of literature than music does):
- T-shirts (always!) and other such items (mugs, stickers, etc)
- collector's editions (e.g. the production quality on Howard Tayler's Schlock Mercenary collections is very high and a number of sketched editions of each new book are made available)
- the lecture circuit (Doctorow is a notable example of this, although I'm not sure how often he attends paid gigs)
- write a short story on a topic requested by the purchaser (yes it takes up "real" writing time, but it's still easier than traveling somewhere to put on a concert)
- books for children and young adults (kid's picture books are much harder to replace with an electronic reader, and it will be quite a while before it becomes feasible for every member of a family to have a good quality ebook reader. An interesting trick I encountered recently was a series aimed at teenagers where the author had pre-written questions in the back designed to aid teachers in using the books for English classes).
- personal access (I bought lunch with one of my favourite authors at a charity auction once - I can certainly see people paying to spend time with their favourite writers)

The other thing missing here though is proper recognition of the difference in the nature of the technology being replaced. For portable music, digital music players displaced portable CD players which displaced portable tape players, all of which were substitutes for the full size audio systems people had in their homes. Music has always needed a dedicated device to turn the recording back into sound. Getting people to replace one device with a new one that does the same job, only better, is comparatively easy (and fast).

Books though, have only ever needed the human eyeball, brain and adequate light to make use of them. Unlike digital music players versus CDs and tapes, where the physical media had only downsides, the physical media in the book case has some real advantages over the digital form (with the independence from any kind of power source being the main one).

Will ebooks replace paper books "eventually"? Yeah, probably, but it's going to be a lot slower than the change in music habits. The difference in difficulty in converting from the physical media back to the digital format also significantly alters the face of the market - unlike music, there is a huge difference in usability and quality between a scanned book and a proper electronic copy from the publisher.

As with music though, people have to remember that being "a writer" is one thing and "making a living as a writer" is something else. You aren't going to achieve the latter without a business model, and as in the music case, the internet's disintermediation means that "submitting manuscripts to publishing houses and hoping one of them bites" is no longer the only option.

The economics of book producing

Mike, I am a big fan of your articles and certainly you are right when you say that the music industry nemesis is itself.
You are also pretty good at applying economic analysis to the music industry: once the marginal cost is 0, then the marginal price has to be 0 too.
But Cooter and Ulen differentiate between two kind of costs. The "cost of expression" and the "cost of distribution". The second cost is, i think, the one you always refer to and the one that has dropped to 0 because of the digital revolution. But what about the "cost of expression", writing a book is not only a very time consuming enterprise, it's also one with a lots of risks and neither the cost nor the risks are lower today. The most important risk of course is that not enough persons buy your book and, therefore, that you won't be able to recoup the investment.
I know my position isn't that strong. You could argue that the net has lowered the risks by an order of magnitude because nowadays the chances to reach a global audience are much higher than before. You could also say that a successful author can recoup the investment with the ancillary rights (movies adaptation or merchandising), or by giving lectures, etc. Finally, you could argue that Homer didn't get the protection of the laws and still he was able to write a masterpiece: books will continue to be produced, for a number of reasons.
I'd love to hear your thoughts about this.

The economics of book producing

Mike, I am a big fan of your articles and certainly you are right when you say that the music industry nemesis is itself.
You are also pretty good at applying economic analysis to the music industry: once the marginal cost is 0, then the marginal price has to be 0 too.
But Cooter and Ulen differentiate between two kind of costs. The "cost of expression" and the "cost of distribution". The second cost is, i think, the one you always refer to and the one that has dropped to 0 because of the digital revolution. But what about the "cost of expression", writing a book is not only a very time consuming enterprise, it's also one with a lots of risks and neither the cost nor the risks are lower today. The most important risk of course is that not enough persons buy your book and, therefore, that you won't be able to recoup the investment.
I know my position isn't that strong. You could argue that the net has lowered the risks by an order of magnitude because nowadays the chances to reach a global audience are much higher than before. You could also say that a successful author can recoup the investment with the ancillary rights (movies adaptation or merchandising), or by giving lectures, etc. Finally, you could argue that Homer didn't get the protection of the laws and still he was able to write a masterpiece: books will continue to be produced, for a number of reasons.
I'd love to hear your thoughts about this.

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Re: Re: Textbooks

I agree, text books are overpriced and they're TERRIBLY written. Hard to learn anything from those darn things but I have to pay for them anyways. Non - text books on subjects you buy from the store for far cheaper are far better at explaining things.

Re: The economics of book producing

The "cost of expression" and the "cost of distribution". The second cost is, i think, the one you always refer to and the one that has dropped to 0 because of the digital revolution. But what about the "cost of expression", writing a book is not only a very time consuming enterprise, it's also one with a lots of risks and neither the cost nor the risks are lower today. The most important risk of course is that not enough persons buy your book and, therefore, that you won't be able to recoup the investment.

I've actually addressed this a few times before, but don't have the time to dig up the links.

Short version: yes, the creation still takes time. That's a scarce good. But the whole point is that you can sell scarce goods. Look at what Jill Sobule did to finance her last album.

And I disagree that the costs haven't gone down. They have. The cost to make a book has decreased tremendously.

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So if I decide to write a book (and lets just assume it is an incredible and popular book) I would have to write it in my free time since i also work a 40+ hour a week job. Then if I released it for free as an ebook how do you propose i monetize that book? Assume I've got the CwF part down solid, what is the RtB?

Release a taster and then set up a "donate to release the complete book" site. If you've done the CwF bit properly and you set up a suitable threshold then you could expect to get enough money to reward your efforts. You could increase the incentive by including a list of donors in the final version of the book.

Re: Textbooks

Re: The death of the publishing industry.

Middlemen like publishers (whether it's movies, books or music) will need to adapt indeed, otherwise they will die.
Instead of gobbling up rights left and right to the creative works (or try to 'create "talent"'), they should sell their services to artists.

Dear $Author,

you want your books to be proof-read? Here our services for x amount of money.
You want your works to be advertised as well, here are our prices:
- print magazine ad per month: $x.xx
- public speaking gig: $xxx.xx
- a spot in Oprah's book club: $xxxxx.xx
etc.

Book piracy is coming my ass

Ok, this just stupidly wrong. Books are the original pirated content. Books have been pirated from literally hundreds of years. The first, or what is historically accepted as the first excluding the bible, published novel, Don Quixote, was heavily pirated. By the time the author got around to writing a sequel there was already a sequel that someone else had written, so what did he do? He wrote in a section where his, the original, Don met the fake one and people loved it.

If anything, the music/movie industry should be learning from the the publishing industry.

So, explain the up side, please

I have been following your articles on infinite/scarce goods for sometime, and generally I agree with you. While it is true the the CwF/RtB concept is an important aspect of marketing a product, when it comes to books, goods fall short.

As a writer, I look to e-publishing to get my works out to the widest audience possible. However, writers have only one good, the story. Once it is out there, it becomes infinite. Writers are paid on the number of books/files sold. Every book or file that is shared without purchase, is money out of the writers pocket.

Unlike musicians, writers don't preform in public. The scarce goods in music are the live performances and swag. Writers have no such options, without a large outlay of their own finances. Writers do not charge for book signings, and the rare speaking appearances for the average writer pay next to nothing.

I do not claim to know everything there is to know about this business. I can only write about what I see. Currently, e-book piracy is very small, relegated to a few blatant sites the actually brag and beg for e-books that they can give away for free. If you or any of your readers have ideas on CwF/RtB for writers, it would be good to see it posted. Some of us behind the keyboards are fresh out of ideas and looking for any way to make our ends meet.

There are many talented writers out there, with great stories to tell, terrified of going to e-publishing because of the threat of piracy. Your assistance and ideas would be greatly appreciated.

Every book or file that is shared without purchase, is money out of the writers pocket.

This is very much false at the moment. This sharing happens (legally!) all the time at public libraries, and it's great for writers, as it helps them make their books known to wider audiences, people who may then decide to buy some of the author's paperbacks that their library didn't have or even that they should just go out and buy the latest hardcover rather than wait for the twenty people ahead in line for it from the library.

The hardcover/paperback/used/public library price discrimination has worked great, both for publicity and for getting the authors (and for now, publishers) paid.

The problem is, what happens when e-books are nicer than paper and you can pirate them the day they're released to the earliest buyers? I'm just not convinced by any of the other "RtB" suggestions that have been offered. Yes, some authors make a little money giving some lectures. Yes, tshirts work well for webcomic authors, but they happen to have content (art and in particular comics) that work well on a tshirt.

And to those who ask why good authors should even be able to work as full-time writers rather than having a day job and writing on the side, the answer is that I want to read a lot of good novels, and that's not going to happen if my favorite novelists can no longer do it professionally.

O'Reilly media

I work for O'Reilly media. We are actually quite bold in being one of the first to market on the whole ebook thing. We actually offer quite a few books as PDF downloads. I know we are a breed of our own, but we don't worry much about piracy in the process. I don't have much of anything to do with the selling or monitoring of any of that, but my understanding is that O'Reilly has plenty of books online in various places that aren't authorized, but that really hasn't hurt the sales all that much.

Of course I hear a lot of this second hand, and it is totally unscientific, but it seems that if you have a good enough product, people are willing to pay. For us our brand is sustained by the community that we foster. We are loved in the tech world and people trust the products we produce. The money follows that sense of community.

Re: So, explain the up side, please

If you think that someone reading your story is money out of your pocket then you have a weird grasp of the image. It's money that you're not getting into your pocket and someone else who knows about you. It doesn't cost you money, blatantly obviously.

There are many talented writers out there, and there is also Sturgeon's Law.